The German owner of T-Mobile UK is trying to gauge bid interest from rival networks ahead of a possible sale of Britain's fourth-largest network. Vodafone is understood to have been approached by bankers working for JP Morgan who are exploring options for its parent Deutsche Telekom. It is said to be keen on a deal, but today declined to comment.

In May, Deutsche Telekom fuelled talk of a sale by writing down the value of T-Mobile UK to just £3.3bn with its shareholders, the German government and private equity company Blackstone, said to be keen on a disposal.

However, at that time Deutsche Telekom chief executive, Rene Obermann, said the UK operation should be given a chance in the "medium term" with a new UK chief executive Richard Moat, who started today, hired from Orange-owner France Telecom to lead the turnaround.

If Deutsche Telekom were to launch a formal sales process it is unlikely Vodafone would have the field to itself, with other operators expected to enter the fray. France Telecom has made overtures in the past.

Vodafone is rumoured to have discussed swapping its Turkish business for T-Mobile UK, which would have handed Deutsche Telekom a strong position in the eastern Mediterranean, where it controls Greek operator OTE. But insiders say it wants cash. Analysts said a deal was unlikely to be imminent, with Deutsche Telekom keen to garner interest ahead of a possible sale when debt markets have recovered.

A Vodafone move on T-Mobile UK would propel it into a leadership position with a market share of around 40%. The prospect of such a dominant mobile player would be likely to attract the attention of the competition authorities. However, Manoj Ladwa, senior trader ETX Capital, said regulators could be tempted to let a deal through as operators in other European markets have up to 40% market shares.

The UK is Europe's biggest mobile market by revenue but intense competition, as fickle consumers switch to cheaper tariffs at the end of their contracts, has squeezed profitability so all the big players are looking for ways to bolster margins. O2, owned by Spain's Telefonica, is the British market leader with a 27% share. Vodafone is second-placed with 25% while Orange has 22%. T-Mobile and Hutchison Whampoa's 3 bring up the rear with 15% and 8% respectively.

Emeka Obiodu, analyst at consultancy Ovum, said combining Vodafone and T-Mobile's UK operations would be very complex, not least because both businesses have posted sales declines over the last three quarters, while O2 and Orange have registered gains. He said T-Mobile had lost customers during each of those quarters: "Can Vodafone be certain that it will have T-Mobile's entire customer base when a deal is completed?" questioned Obiodu. "Or will it pay for a vanishing customer base?"

Obiodu also queried how network sharing deals would be unravelled. T-Mobile has a deal with 3 and Virgin Mobile whereas Vodafone has a deal with O2, presenting what Obidu described as an "octopus due diligence scenario".